FROM late 2015 through 2018, China’s firms and households mostly added to the yuan’s momentum in either direction, buying foreign currencies when the yuan was weak and vice versa.

Lately, they’re doing the opposite. They sold foreign exchange when the yuan was low on bets that China will halt depreciation to avoid capital outflows.

“The change in how bank clients trade the yuan has helped stabilize the currency and reduces the need for the central bank to intervene,” said Ji Tianhe, a Beijing-based strategist at BNP Paribas SA. It also shows Chinese investors have become more experienced in dealing with yuan swings than in previous years, he added.

Chinese firms and individuals net sold the yuan at banks in the three months through April this year, according to State Administration of Foreign Exchange data. That selling came as the yuan traded close to the strongest level since July 2018. They bought the yuan when it tumbled the most in 10 months in May.

A lot of bank clients now buy the yuan when it’s close to 6.9 per U.S. dollar, according to traders. Some analysts have seen that level as the government’s line in the sand for weakness.

Yuan volatility has disappeared since mid-June, as investors assess the deadlocked China-U.S. trade dispute and uncertainty over monetary policy.

A gauge of one-month historical swings in the currency was the lowest among 30 major exchange rates Friday.

(SD-Agencies)